MARKET OUTLOOK FOR 11th JAN 2010
Market managed to hang on to its gains made on Monday and Tuesday despite being sluggish for the next three
sessions. As has been happening for past few months’ market is spending time at each and every level, both
psychological as well as technical. This time its 5280-5310. Market is witnessing some sector churning at current
levels. The leaders, IT and Autos have seen some correction due to profit taking while laggards like Oil and Gas,
Realty as well as infrastructure seem to be attracting some buying interest. IT has been the worst performer as far
as the heavyweights were concerned as strengthening Rupee has put temporary halt to the rising stock prices.
The trio of Infosys, TCS and Wipro has almost reached the short-term support levels of around 2425-40, 690-695
and 655-660 respectively. Infosys quarterly numbers as well as future guidance could decide whether these
support holds or not. As of now it seems that these levels might hold and the sector could see some consolidation
around current levels. Autos look a bit dicier as leaders like Maruti and Hero Honda are showing a bearish bias
as both have slipped below crucial support levels of 1450 and 1665 respectively.
Tata Motors and M&M continue to be in bullish mode though some more slippage in both cannot be ruled out ,
mainly on account of profit taking. On the positive side are thus far ignored stocks like RIL and ONGC. ONGC
managed to close above 1210 and a more decisive break would be a strong close above 1245. RIL is flirting with
the upper side of its side ways range of 1050 to 1120. It has immediate support at 1090. Infra pack is also finding
some buying after a long time and construction counters like HCC, Nagarjuna Constructions and IVRCL in
particular are looking bullish. HCC seems to be the leader right now and could head to around 175-180 in
coming days. JP Associates has some resistance around 165 and beyond that it might see momentum. Realty
counters like DLF, HDIL and Ibull Real Estate could be headed higher in coming days particularly if they
manage to sustain above 396, 380 and 232 respectively. Financial stocks including banks are also finding some
buying and seem to be coming out of corrective phase. Stocks like Kotak, Axis, Can Bank, Dena Bank, LIC Hsg,
IDFC and Union Bank could move higher in coming days.
Nifty has intra day support around 5210-20 and then around 5170 while upmove faces resistance around 5310.
Nifty has a high point at 5310, currently under correction
The Market started the week with handsome gains. By the end of the week, the Index had made a 19 month high
at 5310. This is a market in an uptrend. New highs are indicative of strong upside momentum.
By the end of the week, the markets were going through a process of consolidation. The Nifty fell from its highs,
closing at 5245.
The Index level of 5310 now becomes a significant pivot. A close above this level will indicate continuing
buying pressure. A dip below 5200 to an existing support around 5180 will also suggest an opportunity to buy on
dips. Between 5200 and 5300, there is really no trading opportunity in the Nifty, although individual stocks offer
moves, and are likely to do so.
Support for the Nifty seen around 5300 and Resistance for the Nifty is around 5170-5180
Tech Calls
Scrip LTP Buy Above/Sell Below S.L. Target
VOLTAS 181 Above 184 178 196 3-4 Days
TECHM 1045.1 Above 1053 1035 1090 2-3 Days
Corporate Highlights
• Eicher Motors December truck, bus sales stood at 2,665 units Vs 748 units (YoY).
• Ipca Labs board meet on Jan 21 to consider stock split
• Unitech gets Rs 1493 Cr from Telenor for Unitech stake sale. Uninor is a joint venture between Unitech
and Norway-based Telenor, the 6th largest mobile communications group in the world. Uninor holds a
pan-India UAS license to offer mobile telephony services in each of India’s 22 circles. It has also
received spectrum to roll out these services in 21 of the 22 circles. Telenor holds 67.25% stake in Uninor.
• Kalpataru Power Transmission Ltd, a leading global EPC player in power T&D sector has secured
two orders worth Rs. 250 + crores from Algeria and Tamil Nadu Electricity Board recently.
• Nalco said that part of long term road map is under vision 2020 to break up NALCO into 3
companies. Restructuring the company into 3 verticals is a part of long term road plan. It will take a
time period of 1-3 years.
• Axis IT&T board meet on 12th to approve rights issue
• Euro Ceramics board meet on Jan 15th consider a proposal of demerger of Mumbai realty division
of a company with Euro Ceramics
• Bajaj Hindusthan reported net profit of Rs 85.20 crore in the quarter ended December 2009 as
against net loss of Rs 55.94 crore during the previous quarter ended December 2008. Sales rose
70.97% to Rs 615.40 crore in the quarter ended December 2009 as against Rs 359.95 crore during
the previous quarter ended December 2008.